ECO 3223: MONEY AND BANKING
SUMMER A, 2015
Instructor: Dr. Joel D. Carton
Office: DM 313B
Phone: 305-348-2682
E-mail: joel.carton@fiu.edu
Webpage: http://faculty.fiu.edu/~cartonj
OFFICE HOURS AND APPOINTMENTS:
I will hold drop in office hours on Tuesdays from 2:00 – 4:00 and Wednesdays from 3:30
– 5:30. In addition, I will be available for appointments as the need arises. To insure
availability, appointments should be made with at least 24 hours advance notice.
PREREQUISITES:
Students should have completed ECO 2013 prior to taking this course.
TEXTBOOK:
Mishkin, Frederic S. (2016) The Economics of Money, Banking and Financial Markets,
11th Edition, Addison Wesley
COURSE CONTENT:
This course is designed to cover the operation of financial markets, the determination of
key financial market prices (interest rates, asset prices, and exchange rates) and the
connections between financial markets and macroeconomic performance, with
particular emphasis on the role played by the central bank through its control of the
money supply.
Although I reserve the right to make modifications as I see fit, my tentative plan is to
cover the following topics in order:

Discrete growth and compound interest (ch.4)

Future value and present value (ch.4)

Yield to maturity and holding period rate of return (ch.4)

Real vs. nominal interest rates (ch.4)

Bond price determination (ch.5)

Liquidity preference theory (ch.5)

Default risk and interest rate risk (chs.4,6)

The term structure of interest rates (ch.6)

Calculating a bond’s duration (web appendix)

Stock price determination (ch.7)

The efficient market hypothesis (ch.7)

The CAPM model (web appendix)

Purchasing power parity (ch.17)

Interest rate parity (ch.17 appendix)

Financial market effects of monetary policy shocks (chs.5,17)

The Federal Reserve system (ch.13)

Multiple deposit creation and the money supply process (ch.14)

The tools and conduct of monetary policy (chs.15, 16)
ATTENDANCE POLICY:
I highly recommend that students attend all lectures. When you skip lectures regularly,
you only make the class more difficult for yourself. However, attendance will not
directly figure into the calculation of grades for the course.
ACCOMMODATING DISABILITIES:
In keeping with the Americans with Disabilities Act, I will make every effort to
accommodate the needs of students with disabilities. Any student who, because of a
disabling condition, may require some special arrangements in order to meet course
requirements should contact me as soon as possible to make necessary
accommodations.
GRADING:
Each student’s grade will be based on 3 homework assignments and three exams,
including two midterms and a final exam. In particular, a student’s numerical grade for
the course will be a weighted average of his/her average homework score, average
midterm score, and final exam score. The average homework score will receive a weight
of .3 in the overall grade. Of the midterm average and final exam grade, the better score
will receive a weight of .50, while the worse score will receive a weight of .20.
Letter grades for the course will be determined by students’ relative overall numerical
scores for the course. Specifically, grades will be based on the following scale, although I
reserve the right to be more generous if appropriate:

A: Top 20%

B: Next 20%

C: Next 40%

D, F: Bottom 20%
Note: There will be no extra credit of any kind offered to any student under any
circumstances.
EXAM SCHEDULE:
Exams are scheduled as follows. If you take this class, you must take the exams at the
scheduled times, unless you have a university sanctioned schedule conflict. If you won’t
be available to take the exams at the scheduled times, don’t take this class. There will be
no makeup exams offered to students who miss exams without prior authorization!

Exam 1: Monday, May 25th

Exam 2: Monday, June 8th

Final Exam: Wednesday, June 17th
LATE HOMEWORK ASSIGNEMENTS:
In order to encourage timely submission of homework, late homework will be penalized
as follows.

Assignments submitted after the deadline, but within 2 days of the deadline will lose
50% of their value.

Assignments submitted more than 2 days late will receive a zero.
ACADEMIC DISHONESTY:
I will not tolerate cheating of any kind. Any student who, in my judgment, is found to
have cheated on an assignment or exam will receive an automatic zero for that
assignment/exam.
DROP/ADD DEADLINES:

Monday, May 18th – Last day to add courses without special permission, or drop
courses with a full refund

Friday, May 22nd – Last day to withdraw from the University with a 25% refund

Monday, June 8th – Last day to drop with DR/WI